Flash volatility in Bitcoin ( BTC ), as US economic data began to move the markets, saw bitcoin ( BTC ).
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Analyst: PPI volatility is a hint of what’s to come
TradingView and Cointelegraph Markets Pro data showed that BTC/USD dropped abruptly below $19,000, as Producer Price Index numbers were higher than expected.
The release of the PPI an hour before the market opened, with local lows at $18,967, is a sign that inflation isn’t slowing down as fast as the Federal Reserve might have expected.
However, the losses vanished as fast as they arrived. At the time of writing, Bitcoin had already recovered more than $19,000
“Massive volatility at this amount of PPI. “At least inflation not acceleration,” Michael van de Poppe (co-founder and CEO, trading platform Eight), wrote as part of a Twitter response.
“But, tomorrow during CPI, volatility will be greater. Tonight, also during FOMC minutes
Van de Poppe advised traders not to use leverage during the forthcoming macro events. was tipped to offer some distinctive fakeouts both prior and after release.
Bitcoin’s trading range remained limited, so some market participants didn’t feel the need to take advantage of the relatively small movements on the market.
Il Capo of Crypto, a popular trader, described the setup in his Oct. 11 update on BTC/USD trading as “simple”.
He stated that the price ranged between 19k to 20500 for three weeks.
“If you are prone to flipping flops in the range and losing money unnecessarily then you don’t have patience.” The main scenario is the same. 21k first, then new lows 14k-16k.
For derivatives traders who participated in the greatest-ever buildup in open interest in Bitcoin Futures, a trip to these new macro lows could spell trouble.
According the on-chain analytics resource Glassnode, the total was 660,000 BTC
“Bitcoin futures are open to interest at an all-time high and realized volatility close to all-time lows. It’s quite the combination,” William Clemente, cofounder of digital asset trading and research firm Reflexivity Research, commented.
Bitcoin futures open interest chart. Source: Glassnode
DXY stays steady, but yen is bleeding lower
In the meantime, U.S. equity losses were reduced after initial sinking.
Similar: BTC Price still not at max pain’ — 5 Things to Know in Bitcoin This Week
After failing to clear 113.5, the U.S. dollar Index (DXY), continued its consolidation phase. It remained near 113.3 on the day.
DXY was still more than a point above recent 20-year highs but did not provide any new headwinds to risk assets.
U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView
However, the dollar strength provided fuel for other crises as the Japanese yen recovered to levels not seen in the 1990s.
Despite efforts by the central bank to support the currency, USD/JPY lost those gains through October and now faces new multidecade records.
Financial researcher Nick Bhatia replied, “Reacquaint yourself With the Concept of ‘Intervention Half-Life”,”
“We will see it at UK yields, USDJPY Central Bank freaks out, intervenes and arb traders fade them until the central bank is forced into bringing more.”
USD/JPY 1-day candle chart. Source: TradingView
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph.com. You should do your research before making any investment or trading decision.
